- Nearly half decide based on gut as data is siloed, not readily available
- Lack of alignment biggest barrier to achieving finance transformation
A majority of Malaysian companies are still lagging in finance digital transformation, with only 2% of Malaysian finance and IT leaders reporting that they currently have a robust digital finance transformation strategy.
This is according to Workday’s latest survey entitled, “The CFO and CIO Indicator Study.”
In a statement, the firm said the study examines the state of digital finance transformation and how these efforts are impacted by the finance and IT functions.
It said based on the survey of 1,060 finance and IT leaders globally, including in Malaysia, it is evident that the lack of alignment between finance and wider business transformation goals is the biggest barrier towards achieving finance transformation.
Other barriers faced by companies in Malaysia include cybersecurity challenges, as well as cost and budget issues, it noted
In fact, less than half (43%) of those surveyed are confident in the agility of their finance technologies to facilitate organisational pivots during a crisis, it said.
Additionally, the survey indicated that close to one in two (48%) finance leaders in Malaysia also said they are forced to make financial decisions based on gut instincts despite having the data they need.
This is because it is siloed, not in the right format, or not readily available.
Workday noted that the ability to make data-driven decisions at speed is critical for businesses today.
Yet, the survey highlighted three major challenges Malaysian companies face when it comes to data confidence and agility, all of which are important for successful digital finance transformation.
- Lack of alignment makes transformation difficult: Almost half (47%) of respondents indicate that finance and IT rarely align on the value drivers for technology investments. Among IT leaders in Malaysia, 52% believe their aim to eliminate IT complexity is directly at odds with the expanding scope of the company’s finance function;
- Challenges with existing technology infrastructure hinder transformation: There is currently a technological gap between what CFOs and CIOs know they need and what they currently have. Close to seven in ten (65%) respondents surveyed indicate that their enterprise resource planning systems are not flexible enough to meet the needs of today’s business environment. Nearly half (48%) said that they require improved finance systems that allow them to seize new business opportunities within weeks, instead of months; and
- Need for an increase of cross-functional finance and IT skills: Developing cross-functional literacy skills will be important in improving synergies between the offices of the CFOs and CIOs. However, only a small percentage of Malaysia business leaders (10%) indicated that investments should be made to upskill and hire IT talent with financial literacy skills as a top priority.
This is despite 59% of Malaysian companies saying that they are under pressure to innovate finance technology despite limited financial literacy. This reveals an opportunity for greater cross-functional training and partnership between IT and finance.
Lee Thong Tan, CFO practice lead, Asia at Workday, said the power of data is becoming increasingly apparent in this digital age, but many organisations still face challenges when it comes to managing and harnessing the value of vast amounts of data.
“As the finance function evolves to take on an increasingly strategic role that propels the organisation forward, it is key that IT and finance leaders work closely together to deliver on a finance transformation strategy that leverages analytics and actionable insights for smarter business decisions,” he said.